Credit cards get a bad rap; they can be a valuable tool in your financial arsenal if you know how to utilize them the right way. The problem is, a lot of people develop bad habits when they use their credit cards, and those bad habits can get you into trouble if you aren’t careful. Here are four credit card behaviors we think should be wiped out in 2018 to make way for stronger, more financially sound practices.
Only Paying the Minimum Balance
Knowing that you only have to pay a minimum balance to stay current on your credit card can psychologically trip you up – the more you let that total balance build, the more interest you’re paying, and the easier it is to build up debt. If you can’t pay off your card in full for a few months, set a goal for when you can get back on track, and stick to it. You can also avoid adding new charges to the card as you’re trying to pay it off to limit the interest you pay.
Applying for Every New Card
New cards with special features or rates hit the market all the time, and it’s likely you’ll receive letters and offers for those cards in your mailbox. It might be tempting to apply for each of these cards, but try to refrain from applying for more than one credit card in a six-month period. The more cards you apply for, the more dings on your credit report, which will lower your score.
Keeping Too Many Cards in Your Wallet
Just because you have a bunch of cards, doesn’t mean you need to use all of them all the time. Not only is it a security risk to keep all your cards with you (if your wallet were to be stolen, there would be a lot of opportunity for fraud), but it’s harder to manage which cards have what balance, or what rewards are available from each card. Simplify your process by only using a few cards regularly.
Ignoring the Rewards You’ve Accrued
A lot of credit cards come with different rewards, points, or cash back options. If you accrue these rewards, but don’t take advantage of them, you’re wasting money and losing out on the biggest perk of your account. Plus, you may lose your points if they aren’t used or if your account is inactive for a certain length of time. Be sure to familiarize yourself with the reward options available to you, and incorporate them in your budget for the year.
Are there any other bad credit card habits that you hope to work on during 2018? Leave them in the comments below! And if you’re ready to get a new card, consider a Visa Credit Card from FCU. We have a variety of card options catered to your needs, no matter what they might be. Visit us online or contact your local branch to learn more!
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